With news that prosecutors have finally filed charges against two telemarketers whose relationship with John Swallow and Mark Shurtleff played a part in the “pay-to-play” allegations against the former Utah attorneys general, former Director of the Utah Division of Consumer Protection Traci Gunderson explains why her Bar complaint against Swallow mattered.
The recent news that serial telemarketers Aaron Christner and Ryan Jensen were charged with felony counts regarding their ongoing telemarketing activities was greeted at the Gundersen household with delighted approval.
For one, as the former Director of the Utah Division of Consumer Protection, I am aware of how many hours investigators spent screening complaints, meeting with victims, issuing subpoenas, tracking the respondents (who regularly used fake names to avoid detection), filing citations, attending hearings, and shutting down the scam mentoring businesses created by these two predatory individuals.
For another, it means the Attorney General’s office is finally working in conjunction with the government agency it is tasked to represent in a way that protects consumers instead of harming them — particularly the elderly, uneducated, and poor, who are the typical targets of these marauding coaching enterprises.
After all that has been discovered over the past several months regarding former Attorney General John Swallow’s ties to the telemarketing industry and the “pay-to-play” allegations against him, Swallow may have intended to dismantle the Division of Consumer Protection from the very beginning. The division receives thousand of complaints each year regarding the abusive practices of telemarketers who hawk useless “coaching” products to people desperate for money. A typical mentoring package can cost anywhere from $3,000 to $30,000, most often for its services in helping people start their own online business. These expensive services have occasionally turned out to be nothing more than a copy of Ebay’s seller policies and the ability for the customer to call the mentor’s 24-hour hotline in order to speak with someone with the equivalent of a high school diploma and no other qualifications. If you’re the owner of one of these telemarketing companies who sells “coaching,” you rake in vast sums of money for little to nothing in terms of product.
It is so pathetic, that when asked to provide a one page disclosure form to the public regarding what the actual product is that’s being sold, most of these companies balk that doing so would put them out of business. Instead, these organizations make sizeable donations to political campaigns via nonprofit entities that don’t have to account for the amounts given to political candidates. Predatory industries like payday lenders and the telemarketers for mentoring companies made sizeable contributions to John Swallow. It’s no wonder that his first campaign pitch to a telemarketing businesses being investigated by the Division of Consumer Protection was that he intended to gut it. What better incentive to donate is there for a mentoring or telemarketing company than the possibility that consumer protection laws don’t really have to apply?
City Weekly’s 2012 “Campaign Confidential” news story regarding a taped conversation between John Swallow and the target of multiple Division investigations, Aaron Christner, was the basis of a bar complaint I filed against the former Attorney General in May, 2013. At the time the article was published, the topic of conversation that the Department of Commerce found to be the most egregious was Swallow’s characterization of the Division as “dysfunctional.” The word could have accurately described the relationship between the AGs office and the Department of Commerce, inasmuch as Commerce had been complaining for years that its cases weren’t being moved by Commercial Enforcement in a meaningful or competent way.
That being said, simply calling the State “dysfunctional” in and of itself wouldn’t give rise to the filing of an ethics complaint. The announcement to a target of an investigation that Swallow planned to take over the Division once he became the top prosecutor was also a source of significant consternation, yet even that could have plausibly been argued to have a certain governmental efficiency despite any nefarious motivation behind it.
It was Swallow’s comment to Christner that “the attorneys who handle the case for the Department of Commerce are our Assistant Attorneys General. They work for Mark [Shurtleff]” that I believed was the most problematic of Swallow’s statements. What that communicated to Christner was that the Division’s goals and intentions to collect the $400,000 civil penalty assessed for Christner’s illegal telemarketing activities were immaterial. The Attorney General Mark Shurtleff employed the Division’s collection attorneys, and the AG’s office wouldn’t collect the money on behalf of Consumer Protection if the AG’s office didn’t feel like it. What better way to make the AG’s office not feel like it than becoming a donor to Swallow’s campaign?
The news that perpetual illegal telemarketers Aaron Christner and Ryan Jensen are being criminally prosecuted demonstrates that justice in Utah can and does prevail and that the real source of dysfunction in the state of Utah (pay to play politicians) who have helped foster these kind of businesses have been shown the door. The cost of fraud to our political and economic systems is higher than most people realize, and even more so when the state’s Attorney General extends an open hand to businesses that rely on deceiving the most vulnerable of customers to survive. While my bar complaint against John Swallow was barely a drop in the bucket of all the allegations he faced, to the extent it cast any sunshine on a dysfunctional system designed by an Attorney General beholden to rotten special interests, it was worth it.